March 24, 2008
Suite deal: despite skyrocketing costs, arena would be paid for mostly by luxury suites
Atlantic Yards Report
Norman Oder explains how the proposed Nets arena is such a good deal for Bruce Ratner. Ratner will pay no taxes, only payments in lieu of taxes, so we all get to help him.
Let's try the math. At a 5% interest rate, over 30 years, bond payments would be $61.2 million a year. (That's a somewhat arbitrary interest rate and an online calculator, so my math could be off.)
Barclays would pay $400 million, or $20 million a year, over 20 years. Add $39 million in suites and the $59 million total nearly reaches $61.2 million.
Add a couple of million dollars in other sponsorships--"14 totally integrated partners" are expected--and the arena bond is paid for, at least for the first 20 years. Remember, FCR would pay no taxes, but instead the bond payments would act as payments in lieu of taxes.
It's a suite deal. No wonder they're moving ahead.
Posted by steve at March 24, 2008 8:40 AM